Employee Stock Options and Phantom Stock Options

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Which employee participation plan is right for your company?

In Switzerland, there are mainly two types of employee participation plans:
The Employee Stock Option Plan (ESOP) and the Phantom Stock Option Plan (PSOP)

ESOP

An Employment Stock Option Plan (ESOP) is a contract that allows employees to purchase company stock at a set price in the future.

This plan is favoured by companies that wish to give key employees actual co-ownership of the company. Also on the plus side: It can trigger tax-free capital gains.

PSOP

A Phantom Stock Option Plan (PSOP) is a deferred cash bonus program that simulates the effect of an ESOP without giving actual stock.

This plan is favoured by companies that want to attract, reward, and retain talent without diluting shareholder equity.

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Packages and pricing

PSOP

Package for Swiss Startups

CHF 2’800 (excl. VAT)

Flat fee package contents:

20-min kick-off call with one of our experienced legal experts

Comprehensive advice, assessment of the best fitting compensation plan & advice on key variables (1 hour experienced legal expert call)

Preparation of the participation plan document incl. allocation agreement (2 iterations included)

Adjustment of other documents as required (employment agreement, shareholder's agreement)

‘How-to’ guide for the administration of the plan

Guide for the most important points for employees (in human language, not legalese)

ESOP

Package for Swiss Startups

CHF 2’800 (excl. VAT)

Flat fee package contents:

20-min kick-off call with one of our experienced legal experts

Comprehensive advice, assessment of the best fitting compensation plan & advice on key variables (1 hour experienced legal expert call)

Preparation of the participation plan document incl. allocation agreement (2 iterations included)

Preparation of the corporate actions (articles of association, shareholders' agreement and employment agreements)

‘How-to’ guide for the administration of the plan

Guide for the most important points for employees (in human language, not legalese)

Tax ruling for ESOPs

Upon request

An allocation of shares to an employee usually leads to a so-called non-cash benefit, which is treated the same as a salary for tax purposes and from the perspective of social security contributions.

In order to be able to plan the tax and social security implications of an allocation of shares for both the employee and the company, we always recommend a tax ruling with the competent tax authority.

We are happy to offer the tax ruling together with the ESOP at cost (costs usually between CHF 800 – 2’000).

 

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Additional services on request

Our experts are happy to assist in other employee options and compensation plan matters, such as:

Employee participation workshops: Any form of employee participation is only effective if the employees believe in the plan. We offer tailor-made workshops to ensure that the board of directors and management in particular understand the plan down to the last detail and that the necessary messages can be passed on to the employees in a targeted manner.

Advice on or changes to an existing PSOP / ESOP

Advice on international rollout

Local implementation of an international plan

Other bonus schemes for employees

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Option scheme set-up process

  1. 1
    Kick-off

    In a first call we’ll discuss your case and assess which is the best fitting compensation plan for your company and advice you on the key variables.

  2. 2
    Data collection

    Equipped with our guides and questionnaires you collect and send us all needed data points. If there are any questions we’re just a phone call away.

  3. 3
    Drafting

    After you’ve sent us your inputs we start drafting all key legal documents and adjust other documents as required (e.g. employment or shareholders’ agreement).

  4. 4
    Session

    In a joint session (on-site or video, depending on your preference) we go through all key documents & questions to finalise your option scheme.

  5. 5
    Completion

    We complete any open items and answer your remaining questions before project closure. Finally you’ll receive a how-to-guide on plan adminstration.

How we work

Best-in-class standard, efficient processes, personal support

We’ve created a high-quality standard for legal templates to ensure best-in-class outputs for our customers. Combined with tailored personal support by our experts, we deliver legal services that make a difference.

Christian MeisserCEO & Legal Counsel at LEXR
Best-in-class standard

For our best-in-class standard templates, we take existing documents from at least 5 different sources and create a derived version with modular options.

The draft standard is then reviewed by 5+ legal professionals and first tested with beta clients.

After launch, the standard is continuously improved and adjusted to changes in law.

Efficient processes

To help you solve legal challenges fast, we leverage technology and optimise processes. In addition, we create supporting material in form of guides and FAQs for you to have all information you need easily accessible.

Personal, tailored support

While we believe in the power of technology and high quality document standards, dedicated personal contact and tailoring to your specific needs is equally important for all our projects.

LEXR benefits

1
Expertise

Designing your compensation plan efficiently will both increase your attractiveness and boost employee productivity. We will guide you through the most critical aspects such as the pool size, the strike price, or vesting schedule.

2
Tax know-how

Every participation plan has different tax implications for both employees and the company. Get an in-depth understanding of the tax implications in order to take an informed decision and guide your employees through the process.

3
Legal documents

We will tailor our time tested legal documents to your company’s needs. From corporate actions to employee documents and the plan itself, our legal documents cover the full range required for your plan.

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With LEXR we found an ideal partner to deal with the complex legal framework our company is operating in. LEXR provides fast, flexible and price transparent services for a wide spectrum of cases. A great opportunity.

Yves SpühlerLegal & Finance Manager, Sonect

About us

We’re a growing team of 10+ legal professionals – our stock option experts include:

  • 1

    Michele is focused on corporate and commercial law and has a strong background in M&A transactions. At LEXR he advises Swiss and international founders, start-ups and investors – from incorporation to the first investment rounds, risk financing, complex business transactions and exits.

    Michele Vitali, Head of Startup Financing and Venture Capital

  • 2

    Christian has advised tech-companies and regulated industries on all legal matters and has built a strong track record on helping startups to get off the ground and get funded.

    Christian Meisser, CEO & Legal Counsel

  • 3

    Elie is the Head of Mergers and Acquisitions at LEXR. He is focused on advising Swiss and international founders, start-ups, companies of diverse sizes, and investors in all types of M&A transactions, including namely sales, purchases, mergers, demergers, carve-outs, management buy-outs, joint ventures, and many others.

    Elie Bourdilloud, Head of M&A and Legal Counsel

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